Andrew Leigh

‘EXPLAINING THE RISE OF AUSTRALIAN INEQUALITY’

JUST IDEAS TALK #2

PER CAPITA’S REFORM AGENDA SERIES

MONDAY, 5 DECEMBER 2016

There are many forms of inequality, but perhaps the starkest is the difference between those who own no assets and earn their living by selling their labour – and those who earn vast assets, and can live off the proceeds.

Between these two extremes lies home ownership. It’s not a perfect marker, but if you don’t own a home, it’s likely you live by the sweat of your brow. Conversely, if you’re living off your investments, it’s a pretty good bet you own your home.

At the end of World War II, Australia was a nation where just 53 percent of households owned their homes.[1] In the major cities, the figure was just 46 percent.[2] Most city-dwellers rented. And most homes were made of wood or fibro cement.

Then in the post-war years, something remarkable happened. The Australian home ownership rate surged. By 1954, it was up to 63 percent. By 1961, it was 70 percent. In just over a decade, the distribution of Australian housing wealth became significantly more equal.

It wasn’t just homes. Shared prosperity in the post-war decades meant cars became cheaper. By the 1960s, most Australian homes had a vacuum cleaner, a washing machine, a television and a fridge – items that in the pre-war era were only owned by the most affluent.[3] Even access to university was shared. For someone like my grandfather Keith Leigh, attending Melbourne University would have been impossible on a modest clergyman’s wage. Only a post-war veteran’s scholarship made it feasible.

The intellectual seeds for these changes were sown in John Curtin’s white paper on full employment, and his clearly professed view that ‘there will have to be a fairer distribution of wealth’.

But the surprising thing is what happened next. 

HOUSE OF REPRESENTATIVES, CANBERRA

THURSDAY, 24 NOVEMBER 2016

Suppose for just a moment that the 10 minutes allocated to this speech was distributed as unequally as Australian wealth. If that was true, I would spend the first six minutes and 13 seconds talking about the richest fifth, then two minutes and three seconds speaking about the next fifth, just a minute and eight seconds speaking about middle Australia, 31 seconds speaking about the second-bottom fifth and the last five seconds speaking about the poorest. In short, it would sound an awful lot like the typical Liberal speech.

This is a government that says it fights for freedoms. But the problem is that the sorts of freedoms they fight for are not the freedoms ordinary Australians care about. They fight for the freedom to stash your cash in a tax haven. The freedom for big banks to avoid a royal commission. The freedom to buy a negatively-geared home for your one-year-old baby. The freedom to tax deduct a $6,000 toaster. The freedom to be named in the Panama papers.

Plutocratic politics is on the rise. We on this side of the House thought it was pretty bad when John Howard said he would not move into the Lodge. Now we have a Prime Minister who is too good to move into Kirribilli House. Yet he lectures us about elites. Let's face it: being lectured about elites by this Prime Minister is like being lectured about sportsmanship by John McEnroe, about abstinence by Ozzy Osbourne, about driver safety by Troy Buswell, or about loyalty by the Member for Cook.

This is a government that never takes responsibility. When Adam and Eve were caught in the Garden of Eden, the Liberals sent around talking points saying it was all Labor's fault and that if only we had supported a company tax cut the serpent would not have got there at all.

AUSTRALIAN PARLIAMENT HOUSE

WEDNESDAY, 23 NOVEMBER 2016

I rise representing the member for Blaxland, who is Labor's shadow minister for trade and investment and is presently on parental leave. At the outset I note that the opposition were not provided in advance with a copy of the statement or the document that the minister has tabled, so my comments will be of a general nature responding to the minister's speech and discussing the coalition's role in the fall in Australian investment that we have seen over recent years.

Labor acknowledges the benefits to Australia of foreign investment. As Senator Wong recently noted:

“Last year Australians saved just over $363 billion, yet investment in our economy was nearly $425 billion. This was, of course, nothing out of the ordinary. Over the last four decades, the gap between Australia's national savings and investment has averaged around 4 per cent of GDP.”

By tapping into foreign investment Australia is using the savings of other nations in order to finance investment in our own country. Foreign investment ensures that we enjoy higher living standards and that we have a more productive economy and more sustainable industries. To do away with foreign investment would be to see employment decrease, wages fall, prices rise and the choices offered to consumers decrease. 

LAUNCH OF THE CHINA STORY YEARBOOK

AUSTRALIAN PARLIAMENT HOUSE

TUESDAY, 22 NOVEMBER 2016

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Let me start by thanking the Australian Centre on China in the World for inviting me to speak here today. Whenever I visit your premises at the Australian National University, I am reminded of two things. The first is the wonderful work that you produce, like the China Story Yearbook that we are launching here today. And the second, as a long-time occupant of the maze-like Coombs Building, is how much less snazzy my accommodation was than yours.

In these uncertain global times I am reminded of the Chinese proverb that ‘a single tree does not make a forest; a single string cannot make music’. It is in the spirit of the long history of collaboration between Australia and China that I thought we should start with a simple question. What would Australia be like today had China not opened its economy in 1978?

Based just on merchandise exports, Australia’s economy would be almost 5 per cent smaller. That’s $8,000 less for every Australian household every year.

Prices would be higher. Since 2007, the price of goods we import from China has fallen 20 per cent while the price of goods we produce at home has increased by 20 per cent.

Our universities would be nearly $6 billion poorer each year. They would educate almost 100,000 fewer students.

Our tourism sector would earn $6 billion less each year with 1.2 million fewer visitors visiting our attractions, eating in our restaurants and buying our souvenirs.

If China had remained in autarky, Australia would have had no mining boom, and not much of a dining boom. I’m guessing that if we removed from your home every item bearing a ‘Made in China’ sticker, you’d think you’d been robbed. 

PARLIAMENT HOUSE, CANBERRA

 THURSDAY, 10 NOVEMBER 2016

Those of us who sit in this House are here because people put their faith in our undertaking to represent their best interests. This bill, the Migration Legislation Amendment (Regional Processing Cohort) Bill 2016, would permanently exclude any person who comes here by boat from ever entering Australia. In proposing this measure, the government has made a political gesture that is in no-one's best interests—not those sitting in Manus and Nauru, not those refugees who have come to Australia in the past and not those Australians who are concerned to see that our tax dollars are spent wisely and our migration program is an orderly one.

This is gesture politics at its worst, with all of the effectiveness of the pledge by candidate Trump to build a wall along the Mexican border and make Mexico pay for it. That is how effective this proposal would be. It asks people to make peace with the pettiest and meanest instincts, by dressing up those instincts as strength and certainty. It trades on fear and demonisation of the other, aiming to set up a dichotomy between us and them, hoping that Australians will forget the refugees who have come here in the past, who have helped to make Australia richer, more diverse and more interesting; refugees—from Anh Do to Frank Lowy to Les Murray—who have enriched our country.

It is a bill that demeans the elements of the coalition who have instigated it, and it is a bill that has incensed my electorate. As one of my electors wrote to me:

"I was so disheartened today to read of Mr Turnbull's plans to introduce legislation to the Parliament in the next session that any person seeking asylum who has travelled to Australia via a boat will be banned from ever entering this country...One of our dearest friends, who sadly died last year, was a boat person. He, with his family, escaped Hungary in the 1950s and made his way to Australia...Please do not bend to the far-right bigotry that is holding this government to ransom and do not vote for this ghastly piece of legislation." 

PARLIAMENT HOUSE, CANBERRA

 THURSDAY, 10 NOVEMBER 2016

In the 240-year history of the American republic, no candidate has ever before been elected president without previous military, executive or legislative office. Elections determine power, not truth. It remains true today as it was yesterday that Donald Trump has called women ‘pigs’ and has made fun of a reporter with a disability. He has advocated a ban on Muslim migration and has called Mexicans criminals and rapists. He has claimed that President Obama was born in Kenya and only admitted to Harvard through affirmative action. He has dismissed an American born judge as a ‘Mexican’ who would not fairly hear his case and attacked the parents of a Muslim soldier killed in action.

As Nick Kristof, the New York Times columnist, noted summarising Trump's behaviour over four decades, 'I don't see what else to call it but racism.' These remain facts and those who say that the people in Australia should refrain from stating these facts are effectively saying that when someone is powerful, we should not call out sexism and racism. It was reasonable for those on the other side of the House to describe Mr Trump as 'terrifying', 'kind of weird' and his comments on women 'loathsome'. And those who made these comments should not now refrain from them.

What should progressives do on the day after a Trump victory? A temptation is to retreat but it is vital to remember that reform is two steps forward, one step back. As the great American Martin Luther King once wrote, 'Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.' The great American Martha Nussbaum wrote that many of those who transformed their countries have drawn on the ethic of love including Jawaharlal Nehru, Franklin Delano Roosevelt, Nelson Mandela and Vaclav Havel. As the great American Barack Obama once put it, '… whenever we exaggerate or demonize, or oversimplify or overstate our case, we lose. Whenever we dumb down the political debate, we lose.' And an increased partisanship cannot be met by increased partisanship.

Today is the day in which many progressives are naturally sad and angry, wishing to pull the blanket over their heads and retreat from political life. But I urge progressives to remember the words of another great American progressive, United States senator Cory Booker, who spoke about the politics of love at the recent Democratic National Convention. He concluded with a wry smile that 'love trumps hate'. Maybe not every day, but in the long run.

OLD PARLIAMENT HOUSE , CANBERRA

 WEDNESDAY, 9 NOVEMBER 2016

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Last month, Australian life expectancy hit a new high – 80.4 years for men, and 85.5 years for women. That means a baby born today can expect to enjoy about 30,000 days on the planet.

You can see this as a lot or a little. Compared with past generations, this is an extraordinary amount of time. In cosmic terms, it’s a mere blip.

But rather than asking “how long do I have?”, the better question is “what can I do with the time that I have?”. For most of us, that comes down to doing good work. A typical career lasts around 80,000 hours of work. How do we make the most of that time?

Adam Smith, one of the founders of modern economics, is best known for his book An Inquiry into the Nature and Causes of the Wealth of Nations. But in an earlier work, The Theory of Moral Sentiments, Smith gave what I think is one of the best answers to the question of how we should spend our lives. He wrote:

‘To be amiable and to be meritorious; that is, to deserve love and to deserve reward, are the great characters of virtue… The consciousness that it is the object of such favourable regards, is the source of that inward tranquillity and self-satisfaction with which it is naturally attended… Man naturally desires, not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love.’

Talking with people in business, I’m often struck by how well Smith’s words encapsulate what we do. Most people don’t just want to make money; they want to be the kind of person that others look up to. In Smith’s formulation, most of us want to be ‘lovely’.

The Age of Ambition, New Matilda, 20 October 2016

Globally, these are tough times to be a social democrat. The cumulative social democratic vote share in Western Europe has fallen by one-third, to its lowest in 70 years. Angry politics is alive and well in the person of Trump and Le Pen, Farage and Wilders. It’s a politics that emphasises differences within the community, and urges citizens to jump at the shadows of trade, immigration and foreign investment.

Amidst secular stagnation, fear of terrorism, and a hate-filled politics, a message of inclusion, egalitarianism and multiculturalism doesn’t always resonate. In that environment, what is the best approach for the left’s party of government, the Australian Labor Party?

Labor is now in our 125^th year – the seventh age for Australia’s oldest political party. Some have argued that we need to defend the status quo, and tweak our way to a better world. There’s nothing inherently wrong with any of this. Indeed, there’s a bit of me that’s temperamentally technocratic – desiring to defend against cuts, and fight for better indexation.

But it’s not a whole program. Labor’s story has always had a touch of élan, a bit of vision, a sense of excitement. Ours has always been the party of ambition. 

Dr LEIGH (Fenner) (18:42): I was 11 years old when I bought my first computer. It was back in 1984 and the machine called an Aquarius. It had rubber keys, a cassette drive, a black and white television was its monitor and it held a little less than four kilobytes in memory. Back then, the machine was, well, not start of the art, but pretty close. We have come a fair way from that to the advent of the iPad Air.

We didn't get there by settling for second best. We did not get there by saying, 'Well, the technology of today will do us for the course of the next generation.' That is the lesson that this government has failed to learn with its National Broadband Network. It is a government that thinks that investing in the future involves buying millions of metres of copper. Since the change of government, we have seen Australia fall from 30th to 60th in global internet rankings.

Dinner Speech to the Japan Update

Australia-Japan Research Centre

Australian National University

Canberra

21 September 2016

Let me start by thanking the Australia-Japan Research Centre for inviting me to speak here tonight. In 2014, the Japanese and Australian Prime Ministers Abe and Abbott expressed their strong support for the Australia-Japan Research Centre in promoting research collaboration and intellectual exchanges between Australia and Japan on political and economic relations. Both sides of politics strongly support the Australia-Japan relationship as well as the great work of the Australia-Japan Research Centre.

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But I want to start tonight with the story of Sacarnawa Deconeski. Sacarnawa was the first recorded Japanese resident in Australia. He settled in Queensland having reached Australia in 1871, applying for naturalisation in 1882.Although most Japanese settlers in the late 1800s worked as pearlers in northern Australia, Sacarnawa was different. He was a professional acrobat.

After travelling around Australia as an entertainer for many years, in 1875 Sacarnawa married a woman from Melbourne. As many of us do in later life, Sacarnawa gave up acrobatics. He and his wife set up a farm in Far North Queensland near the town of Herberton. At its height, Herberton was the richest tin mining field in Australia and was home to 17 pubs. In case you’re wondering, Canberra has 56 pubs and clubs, but on per capita terms Herberton was doing pretty well for a small town.

By the start of Federation, Australia had 4000 Japanese immigrants, mostly based in Townsville where the Japanese Government had established its first consulate in 1896. During Australia’s shameful period of the White Australia Policy, the consulate closed in 1908 and it wasn’t until 1966 that consular offices reopened in Brisbane and, eventually, in Cairns, too.